PETER VAN ONSELEN: Welcome back. You’re watching Sunday Agenda. I was just talking to Finance Minister Mathias Cormann. Our guest now is Labor Shadow Infrastructure spokesman Anthony Albanese. The last question I issued to the Finance Minister was about infrastructure spending and whether it was dwindling off under the Coalition. He outright rejected that. What is your response to that?

ANTHONY ALBANESE: Well have a look closely at what he said. He said “Oh No, we are doing things especially with the private sector”. That is code for we are cutting. The truth is that they were due to spend $9.2 billion in the last financial year. They actually spent $7.6 billion. It declines over the forward estimates to $4.2 billion dollars in 2020-21.

VAN ONSELEN: What suffers as a result of that?

ALBANESE: What suffers is public transport, road funding. You have circumstances that over the decade – the Parliamentary Budget Office produced figures two weeks ago that show over the decade the decline in infrastructure investment as a proportion of the national economy – GDP – goes from 0.4 per cent to 0.2 per cent – halved. Now that is a recipe for lower economic growth, lower job creation. It means the Government is getting itself into particular dire straits over not investing in projects such as the Cross River Rail in Brisbane that was approved by Infrastructure Australia in 2012, funded in 2013 by the Federal Labor Government, with an agreement with Campbell Newman’s Queensland Coalition Government, and then cut in 2013 when Tony Abbott came in and he said: “We’ll have no funding of public transport”. So all of that funding was cut, just like the Perth public transport – the airport rail line, just like the Melbourne Metro, just like public transport in Adelaide, it was all cut. The Parramatta-Epping rail line was taken out of the Budget.

VAN ONSELEN: Is this a good reason why we need a new way of structuring the Budget? I mean the way businesses do so that all that spending around infrastructure isn’t cut in the name of, if you like, making the books look they are better than they might otherwise be?

ALBANESE: That is a good idea to draw a distinction between recurrent and capital expenditure. But more significantly this Government actually has a strategy for the withdrawal of the Commonwealth from direct funding. It has established this expenditure financing unit in the Department of Prime Minister and Cabinet. Now it is designed to recommend financing options for projects that will provide a positive return to government on capital. So the only projects really that do that are toll roads. So you end up with a complete distortion of the infrastructure market. You end up with no strategy to actually deal with urban congestion and you end up with a decline.

It is no accident that the drop-off heads to the fourth year of the forward estimates where they are trying to indicate a path a return to surplus. But what you have therefore as well is a politicisation of the program. So in Perth when the WA McGowan Government got elected they transferred the funding from Perth Freight Link to other projects because they realised they were in diabolical trouble in WA. But in Queensland they are still suffering. Victoria is still getting under 10% of the national infrastructure budget with one in four of the population in Australia’s fastest-growing capital city of Melbourne. So you have an infrastructure plan that has been condemned by the infrastructure sector and that is important for our economy. The two ways you can really drive economic growth and jobs are investing in capital infrastructure and or in people through skills and training and developing up the workforce for the Asian century so we can compete.

There is another path of course which is to try and drive down wages and conditions and compete in that way. But that is certainly not a way that is acceptable to the Australian people.

PAUL KELLY: You’ve campaigned for a long time about High Speed Rail. You have introduced a Private Member’s Bill about an authority. To what extent are we losing an opportunity here in terms of establishing the basis for High Speed Rail. How concerned are you that we might we actually be squandering the chance to do something big?

ALBANESE: Well this is critical and Infrastructure Australia has produced a very good report about the preservation of corridors. I am concerned that Infrastructure Australia has been sidelined by this Government. It is their job to recommend financing of projects, not establishing a separate unit in Prime Minister and Cabinet. It is also their job to look beyond the political term, to look at the big picture and they have identified High Speed Rail in particular – preservation of that corridor as being essential. They have identified the future cost as well of not doing that as being literally tens of billions of dollars potentially in terms of the increased costs. At the moment you have a corridor that has been identified but the Government has essentially put it all on the shelf. When I was there as a Minister, I appointed a body that looked at it in real hard economic terms. It included people like Tim Fischer to try and get that bi-partisanship there. It included Jennifer Westacott, the CEO of the Business Council of Australia and other senior representatives. They all recommended unanimously the creation of this authority so that you get the co-operation across these jurisdictions –NSW, Qld, ACT, Victoria, with local government, with the private sector.

I think the government should do that. Start with the preservation of the corridor and also call upon those international consortia who have experience in building and operating High Speed Rail to put forward their proposals. We know there is a great deal of interest in Australia from companies in Japan, China, France, Italy, Germany – they are all interested. The Spanish – they are all interested in engaging in this.

KELLY: If you become minister can we expect to see these plans and these visions actually become a reality? What would be the priority in terms of High Speed Rail?

ALBANESE: In terms of High Speed Rail establishing the authority and mandate them to preserve the corridor. That is the first thing. We need to plan today so tomorrows are possible. That is the concern about the High Speed Rail failure at the moment, is that literally we could find ourselves in ten years’ time saying costs have come down, which they are for High Speed Rail – technology has been improved, we have a whole lot of global experience to draw upon – and now it’s not possible because the cost of simply purchasing homes that have been built along that corridor is too much. And there’s a second potential as well which is opportunity cost. One of the reasons why High Speed Rail stacks up is regional economic development. Along the corridor be it Shepparton, Albury, Wagga Wagga or Canberra – the national capital, the Southern Highlands and then right up the north coast to Taree, Port Macquarie, Lismore. There is potential for value capture along that corridor as well because it will drive growth.

KELLY: So you are talking about Brisbane, Sydney, Canberra, Melbourne. That is the sort of axis you are talking about?

ALBANESE: Yes and the first stage would be Sydney to Melbourne because that in terms of population is the highest. It showed that, the study had a cost benefit analysis showed, $2.15 of benefit for every $1 of cost that we undertook. So we know that that stacks up.

VAN ONSELEN: How quickly do you get there, Sydney to Melbourne on the High Speed Rail?

ALBANESE: Sydney to Melbourne under three hours.

VAN ONSELEN: With stops?

ALBANESE: No, no. What the study showed is it does essentially two things. One is that in the capital city – under three hours Sydney-Melbourne, Sydney-Brisbane. But secondly you would have regional trains if you like that are high speed so you can get to Canberra in well under one hour from Sydney. That would transform that corridor. It would make Canberra is Australia’s largest in-land city as well as our bush capital, a fantastic place to live. It would deal with economic growth and jobs in the short term. It also is one way of dealing with housing affordability.

KELLY: So in terms of the economics of this, I mean one of the arguments which has always been used against High Speed Rail at the end of the day, that the numbers don’t add up, that the business proposition doesn’t work. Now what is your response to that? Do you think at the end of the day that this can be feasible in financial terms?

ALBANESE: Look at the study that was done. It was done by AECOM. It was a very comprehensive study. It went to the design of the stations. The design of Central Station in Sydney is essentially done underneath the existing platforms which are there. There is a cost. An example of the cost is that, I think it is, from memory, it is 82km of tunnelling required. Sixty-seven kilometres of that is in Sydney. So that is where the big cost is, and obviously a bit of tunnelling required at either end as well in Melbourne and Brisbane. But the big cost is Sydney. But it doesn’t work without Sydney being at the centre of it. But it stacks up financially.

KELLY: If we could just change to the republic. Bill Shorten announced last night to the Republican Movement that there would be a question put to the Australian people at the end of the first term of a Shorten Government, if you like a plebiscite about the issue of a republic. Now this is different to Malcolm Turnbull’s position. Turnbull has said that he doesn’t believe the issue can be prosecuted successfully while Queen Elizabeth is on the throne. What is your response to this? Is this is just a gesture from the Labor Party to get the issue back on the table or do you think it is actually possible to achieve a republic despite the fact that we’ve still got Queen Elizabeth?

ALBANESE: Well it’s a plan to achieve a republic by doing it in that two-stage process, by firstly getting the question asked: do you support Australia becoming a republic? And then later on of course there would been to another process after that.

KELLY: Another plebiscite presumably? You’d have to have a plebiscite on the model presumably?

ALBANESE: And you would have to have a constitutional referendum obviously is how you change it.

VAN ONSELEN: So two plebiscites and then a referendum?

ALBANESE: No, it’s possible that what you would have in terms of having the debate, is that in the process of having the debate about do you want an Australian republic with an Australian head of state, you would have a consensus emerge about a model and you wouldn’t need to have a third stage.

VAN ONSELEN: Would you really though? You well remember the last one.

ALBANESE: Well you may well, though, have that emerge. So what we are saying firstly, we’re not getting ahead of ourselves. The first question is do you want Australia to be a republic with an Australian head of state. Simple question. Get it out there. Once you do that, then you’ll have …

VAN ONSELEN: Sure, Sure. But if you get a majority that say yes to that, then presumably you will want to put the model options to the people again as a plebiscite? Without that you end up where Malcolm Turnbull ended up.

ALBANESE: We’re not getting ahead of ourselves. Well Malcolm Turnbull showed I think the political skills during that referendum campaign that he has brought to the prime ministership and I think some of the people in his party weren’t really paying attention to either that or to his first stint as Leader of the Liberal Party.

KELLY: In his speech last night Bill Shorten also made it clear that Labor’s prior commitment – its first commitment on constitutional reform – is to indigenous reform. Of course this is now on the table. But there is no certainty – there’s no certainty – that the Government will even put a referendum along these lines given what Malcolm Turnbull has said so far and given the recommendations from the Referendum Council. Can we therefore assume that if this referendum is not put during the life of the Turnbull Government, that it would continue to have priority under a new Labor Government and that a referendum would be put under a new Labor Government?

VAN ONSELSEN: And then we could talk about fixed four-year terms being fixed as well as another referendum.

ALBANESE: Well Paul the important thing about the constitutional recognition of the First Australians is that it hasn’t been a partisan issue and it certainly shouldn’t be because it would fail if it is. So what we will do is continue to work constructively with the Government. This is an area where that has happened. To be fair, of all the turmoil that we have seen in politics over recent years, the fact is that whether it is Tony Abbott or Malcolm Turnbull they have both worked with Bill Shorten. They have worked as well with the indigenous members of Parliament who are very engaged with this issue – people on our side people like Linda Burney and Pat Dodson, I think quite rightly regarded as the father of reconciliation in this country, or people like Ken Wyatt. So these are important issues to be worked through. We want to get an outcome. I think it would be a major setback for reconciliation if any vote was put that wasn’t successful.

KELLY: Well precisely. But I mean do you think it is possible to get a sufficient degree of community-wide support to put the referendum? And one of the reasons I ask this is because some of the senior indigenous figures that you have just mentioned in the Labor caucus have expressed a degree of reservation about this proposal, about the actual recommendation from the council.

ALBANESE: Well they are quite rightly cautious. They have put a huge amount of effort into this and they understand how critical this is. It might be academic for us around the couch here. For the First Australians this is something that goes very deeply to their soul – this recognition. So I believe that we can work this through with a bit of goodwill and I am hopeful that that is the case.

VAN ONSELSEN: You’d need to keep it separate though as a referendum from other issues that could become partisan. The last thing you would want is failure on the Indigenous recognition referendum if it was getting put at the same time as more contentious issues like fixed four-year terms or even a republic.

ALBANESE: You would need to prioritise it. In my view the correct priority is constitutional recognition of the First Australians.

KELLY: If we could just move to the equality debate, or the inequality debate, which Bill Shorten is running on. Do you think Labor can win the next election with inequality as its main theme?

ALBANESE: I certainly think we can win with a comprehensive plan across the board. The equality agenda is an agenda for economic growth and jobs. It’s actually good economic policy to have more equality. Why is it that when someone like Mathias Cormann or any of the others in the Government – Scott Morrison – speak about cuts that are necessary to the incomes of people on low and middle incomes, that is called budget repair; but anything at the top end is called class warfare? Why is it that is the case? They reflect their own prejudices there. The fact is that we do need to deal with the growing inequality in this country. Quite frankly, if the Government wants to continue to argue that there isn’t greater inequality in this country for people out there struggling to become first home owners in their entire lives, some are just despairing about that; for people who have lost their penalty rates; for people who haven’t had a real wage increase for their entire working lives, for people under real pressure to pay their bills, then I think that is a losing position for the Government.

KELLY: Scott Morrison has said, defending the Government’s record, that the top one percent of income tax earners pay 17 percent of tax revenue and the top 10 percent contribute almost 50 per cent of total tax revenue. Do you think that’s enough or should they be paying more?

ALBANESE: I think they should pay what they are supposed to pay Paul. And the fact is that when that nurses out there are on $50,000 and they know people who are earning many times more than that but paying less tax than they are, then there is something wrong with the system. And all we are saying with today’s announcement that will be made this morning by Bill Shorten is that people should not, because of their privileged position, be able to avoid paying their fair share of tax and the fact is that that is happening. That’s why we are dealing with Capital Gains Tax and negative gearing – a minor reform but I think an important one in terms of housing affordability. We’ve put forward previously the position of limiting the amount which people can claim as a tax deduction for paying their accountants and then today we will have further announcements. That is Labor leading from Opposition and I do notice that Mathias Cormann this morning didn’t rule out himself, changes to trusts. I’ll make a prediction here. Put it in your little computer so that you can bring that back in a year’s time like you bring back Steven Ciobo’s quotes, that they will, down the track, do something about trusts because they know, they know, that it is not fair at the moment. It will be just like on superannuation tax concessions where they said it was a bad idea. They opposed it. This was class envy. Then they did it.

KELLY: Now we can all agree that everybody should be paying the tax that is due to them under the law. Can I just ask you though, in terms of this debate about the top one percent, and there is no doubt that the top one percent have done incredibly well in terms of wealth and income in recent years, have they done too well? Do you think the top one percent is too rich in this country and is that unhealthy?

ALBANESE: Well that’s the wrong question Paul. The question that I am concerned about is the bottom people, the people struggling to pay their mortgage. The people struggling, who go to the supermarket and, you know, have to make judgments over whether they can afford something other than just mince this week in terms of meat for their kids. That’s a real circumstance that goes on in this country. I have been there. I know what it’s like and they are the people that I am concerned about and I want to make sure that they can get every opportunity in life that they deserve.

KELLY: OK. Now that is not just an equality problem though is it? That’s a problem of economic growth. It’s a problem of stagnant wages. It’s a problem of poor investment and poor productivity.

ALBANESE: Exactly, which is why you need infrastructure investment, why you need to invest in education, why you need to invest in training.

KELLY: Sure. But is it valid for Labor to say that the essential problem, the main problem, is inequality, whereas when you look at the bottom 30 per cent it seems to me very, very clear that what we are talking about here is poor economic growth, stagnant wages, underemployment, a whole series of factors – not just inequality.

ALBANESE: But one of the reasons why that is happening Paul, is because of the Government’s fiscal position, because some people and some companies are able to evade paying their fair share, which then makes it very hard to then invest for example, in skills and training in lifting people up – in giving people that opportunity. And the next Labor Government should be consistent with the Hawke and Keating governments. There’s been a lot of rewriting of history here and people should read your books on those periods. The Hawke and Keating governments weren’t about economic growth as the end in itself. They were about economic growth so as to create the space for good social policy to lift people up.

KELLY: Very true.

ALBANESE: Lifting up high school education for example. When Hawke became the Prime Minister three out of ten Australians did their HSC. When he left that figure was eight. Compulsory superannuation – brought in by the Hawke and Keating governments that made a huge difference; Medicare; the improvements to the social wage. All of these reforms where there. They were all opposed by the way, by the Tories at the time. The rewriting of history – every time I see the Liberals out there praising Hawke and Keating, I think they should have a look at some of the question times when Paul Keating was treasurer when the mob opposite were opposing. Compulsory superannuation was theft from working people and employers. Now we are not going to cop this rewriting of history. The next Labor Government will be strong on the economy but with a purpose.

VAN ONSELEN: Just final one Mr Albanese. We are talking about how to address inequality. The French economist Thomas Piketty talked about a wealth tax. Do you have any sympathy for that?

ALBANESE: We’ll I am not about to announce new taxes.

VAN ONSELEN: Do you have a philosophical sympathy for it?

ALBANESE: Nice try. What I have sympathy for is Australian solutions for Australian problems and you have seen two of those already, in terms of the cut down on accountants’ fees being deductible and the housing affordability package and today you will see a significant announcement from Bill Shorten on trusts and I think that Labor is leading from Opposition. I mean someone has got to lead in this country because the other mob are too busy fighting each other.

VAN ONSELEN: Anthony Albanese, we appreciate your time. Just before you go one final one if I can: Labor’s NSW conference; the recognition of Palestine. This is something that Michael Danby out of Victoria is more than a little livid about. Is this a real change of tone for the Labor Party?

ALBANESE: Labor supports a two-state solution. One of those is Israel. One of those is Palestine. We support negotiations on the basis of secure borders. We want a peaceful resolution to the Middle East. It has had a huge impact on the entire region, but you can’t have circumstances whereby for more than 50 years since the 1967 war you have had now generations living essentially without self-determination. I’m a strong supporter of Israel, but I am also a strong supporter of Palestine and I see the two as being consistent. Having security with the current tensions that are there is like trying to say you can have security between Ryde and Marrickville because that is the sort of distance that we are talking about here. So I think there is a common interest of Israelis and Palestinians and Australia should play a role in that.